TBill WAY up; accepted volume at weekly auction tops Rs. 20 b

The Central Bank’s borrowing costs increased at its weekly Treasury Bill auction held yesterday, as it accepted more than Rs. 20 billion for the first time in three months.

Wealth Trust Securities said the Weighted Average Yield (WAY) on the 364-day and 182-day bills increased for a sixth consecutive week by eight basis points (bp) 12.81% and two bp to 12.07% respectively while the benchmark 91-day increased by seven bp to 12.74% in contrast to its last week’s dip of one bp.

The 182-day bill continued to dominate the auction as it increased its representation to 55% of the total accepted amount, which in absolute terms is at a 16-week high.

In secondary bond markets, a very limited amount of activity was witnessed subsequent to the Treasury bill auction results, mainly on the five-year and six-year maturities at levels of 12.45% to 12.48% and 12.95% to 12.97% respectively, reflecting a marginal increase in yields.

In secondary market bills, continued selling pressure saw the 91-day and 182-day bills been traded above its weighted averages, at levels of 10.80% and 12.08% respectively while the 364-day bill changed hands at its weighted average.

TBill...

In money markets, surplus liquidity on an overnight basis continued to decrease as the Central Bank drained a volume of Rs. 5.43 billion from the system at a weighted average of 9.33%, according to Wealth Trust Securities.

“However, overall liquidity was at Rs. 6.77 billion as a further amount of Rs. 1.34 billion was deposited at CBSL’s repo window rate of 7.75%. Overnight call money and repo rates remained steady to average 10.58% and 9.63% respectively,” it added.

The USD/LKR rate meanwhile remained steady for a third consecutive day, to close the day at Rs. 130.30/.32. The total USD/LKR volume for the previous day stood at US$ 6.20 million.